Virginia Senate Passes Bill Allowing State Banks To Offer Bitcoin Custody Services

• The Senate of the Commonwealth of Virginia passes a measure allowing banks to connection custodial services for bitcoin and different cryptocurrencies.
• Banks volition adhere to self-assessment criteria successful bid to find whether oregon not to connection custodial services.
• If banks take to run arsenic a fiduciary it requires caller backstage keys to beryllium generated for and held by the bank, portion non-fiduciary banks let customers to support rubric ownership.

Delegate Christopher T. Head, Senate subordinate for the authorities of Virginia, introduced House Bill 263 successful aboriginal January 2022 to let accepted banks operating successful the Commonwealth of Virginia to connection custodial services for bitcoin and different cryptocurrencies.

“A slope whitethorn supply its customers with virtual currency custody services truthful agelong arsenic the slope has 26 capable protocols successful spot to efficaciously negociate risks and comply with applicable laws,” the measure outlines.

In bid for banks to connection custodial services they indispensable spell done a “methodical” process of self-assessment, which requires it to “carefully analyse the risks progressive successful offering specified services,” the measure provisions.

The measure continues to explicate the appraisal criteria, stating that expectations of the banks see implementation of effectual hazard management, controls for the measurement and power of applicable hazard associated to the banks holding custody of cryptocurrencies, confirmation of due insurances successful place, and the attraction of a work supply oversight programs designed to curtail risks to work providers.

The measure seeks to let banking infrastructure to enactment successful either a fiduciary, oregon non-fiduciary capacity. Should a slope privation to run successful a fiduciary manner:

“Acting successful a fiduciary capacity, the slope shall necessitate customers to transportation their virtual currencies to the power of the slope by creating caller backstage keys to beryllium held by the bank.”

Should a slope privation to run successful a non-fiduciary capacity:

“In providing specified services successful a non fiduciary capacity, the slope shall enactment arsenic a bailee, taking possession of the customer's plus for safekeeping portion ineligible rubric remains with the customer, meaning that the lawsuit retains nonstop power implicit the keys associated with their virtual currency.”

With a full sweep of 39-0, the measure heads for Governor Glenn Youngkin’s table to beryllium signed into law.